Summit Midstream Corporation announced on December 2, 2024, the completion of its previously announced acquisition of Tall Oak Midstream Operating, LLC and its subsidiaries. The acquisition was finalized after receiving shareholder approval on November 29, 2024. This marks a significant milestone in Summit's growth strategy.
The total consideration for Tall Oak Midstream III included $155 million in cash, 7.5 million common units of the Partnership, and an associated 7.5 million shares of SMC Class B Common Stock. Additionally, up to $25 million in contingent cash consideration is payable over certain measurement periods through March 31, 2026. This transaction rebalances Summit's portfolio to approximately 50% natural gas-oriented drilling activities.
Pro forma for the acquisition, Summit's total leverage ratio as of September 30, 2024, is approximately 3.8x. The completion of this acquisition is expected to increase the company's scale and enhance its value in a credit-accretive manner. The Tall Oak assets are located in the Arkoma Basin and include significant gas gathering and processing infrastructure.
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